ID/Grace Dwitiya Amianti& Alex Dungkal | October 29, 2012
Indonesia’s credit card holders booked an 11 percent increase in transaction value in the January-August period from the same period a
Indonesian consumers are opening up to the use of credit cards, but the central bank is keeping tight restrictions on who can use them. (SP Photo)
year ago, thanks to rising income and a change in mind-set about the cards’ utility, an executive at a credit-industry association said last week.
Steve Martha, the secretary general at Indonesian Credit Card Association (AKKI), said the outstanding value of credit card transactions in August was Rp 133.21 trillion ($14 billion). That compared to Rp 119.6 trillion in the same period in 2011.
He said there were 15 million registered credit cards in Indonesia at the end of August, rising from 14.16 million a year earlier.
“This number is likely to continue rising, in line with consumers’ increasing awareness of the utility of credit cards,” Steve told Investor Daily on Thursday.
A strong rise in the numbers of credit cards has been noticeable over the past two years. At the end of 2009, there were only 12 million credit cards in circulation, a number that jumped to 13.6 million and 14.6 million at the end of 2010 and 2011, respectively.
He added that Indonesian consumers do not perceive credit cards as a luxury symbol, or for going on spending sprees.
“In the past, a credit card was perceived as a symbol of a consumptive way of live,” Steve added. “Now people are starting to think about using them as a practical tool for transactions.”
He said a factor that helped in reshaping consumers’ perception of credit cards was a constant education push from banks and financial authorities.
“There is a good relationship between the card issuers [banks] and customers,” Steve said. “Should there be a problem come up in regards to the billing, it will be easier to reach a solution.”
He also applauded the central bank’s tougher new rules on qualifying for a credit card, ensuring that irresponsible use stays at a minimum.
A regulation issued by the central bank, and which went into effect on Jan. 6, sets the minimum monthly income for cardholders at Rp 3 million and the maximum credit limit at three times the monthly income.
Furthermore, anyone who earns less than Rp 10 million a month is allowed to have a maximum of two credit cards. If they want to own more, they must be individually assessed by banks.
The central bank also restricts the use of credit cards to purchase items bought through loans, like cars or houses, in a bid to prevent cardholders being trapped in mounting debt.
“As banks that issue credit cards put more stringent practices in place, it has reduced bank fraud [through credit cards],” Steve said.
Difi Ahmad Johansyah, the central bank spokesman, said the bank still sees the transaction growth as normal.
As Indonesia’s average per capita income continues to increase — it went from $3,000 in 2010 to $3,500 last year — consumers to think about improving their standard of life.
Difi said the high increase in credit card transactions in August has not yet caused much trouble, as non-performing loans were far below 5 percent.
Handayani, senior vice president of consumer cards at state lender Bank Mandiri told Investor Daily that non-performing loans of its credit card was 2.2 percent of its total outstanding loans from January-September 2012, which reached Rp 12.9 trillion.
Bank Mandiri picked up Rp 1.33 trillion from interest and administrative charges.
Analysts predict that private consumption and investment will continue to fuel the country’s economic growth at above 6 percent, keeping the country growing at a healthy clip.
Steve Martha, the secretary general at Indonesian Credit Card Association (AKKI), said the outstanding value of credit card transactions in August was Rp 133.21 trillion ($14 billion). That compared to Rp 119.6 trillion in the same period in 2011.
He said there were 15 million registered credit cards in Indonesia at the end of August, rising from 14.16 million a year earlier.
“This number is likely to continue rising, in line with consumers’ increasing awareness of the utility of credit cards,” Steve told Investor Daily on Thursday.
A strong rise in the numbers of credit cards has been noticeable over the past two years. At the end of 2009, there were only 12 million credit cards in circulation, a number that jumped to 13.6 million and 14.6 million at the end of 2010 and 2011, respectively.
He added that Indonesian consumers do not perceive credit cards as a luxury symbol, or for going on spending sprees.
“In the past, a credit card was perceived as a symbol of a consumptive way of live,” Steve added. “Now people are starting to think about using them as a practical tool for transactions.”
He said a factor that helped in reshaping consumers’ perception of credit cards was a constant education push from banks and financial authorities.
“There is a good relationship between the card issuers [banks] and customers,” Steve said. “Should there be a problem come up in regards to the billing, it will be easier to reach a solution.”
He also applauded the central bank’s tougher new rules on qualifying for a credit card, ensuring that irresponsible use stays at a minimum.
A regulation issued by the central bank, and which went into effect on Jan. 6, sets the minimum monthly income for cardholders at Rp 3 million and the maximum credit limit at three times the monthly income.
Furthermore, anyone who earns less than Rp 10 million a month is allowed to have a maximum of two credit cards. If they want to own more, they must be individually assessed by banks.
The central bank also restricts the use of credit cards to purchase items bought through loans, like cars or houses, in a bid to prevent cardholders being trapped in mounting debt.
“As banks that issue credit cards put more stringent practices in place, it has reduced bank fraud [through credit cards],” Steve said.
Difi Ahmad Johansyah, the central bank spokesman, said the bank still sees the transaction growth as normal.
As Indonesia’s average per capita income continues to increase — it went from $3,000 in 2010 to $3,500 last year — consumers to think about improving their standard of life.
Difi said the high increase in credit card transactions in August has not yet caused much trouble, as non-performing loans were far below 5 percent.
Handayani, senior vice president of consumer cards at state lender Bank Mandiri told Investor Daily that non-performing loans of its credit card was 2.2 percent of its total outstanding loans from January-September 2012, which reached Rp 12.9 trillion.
Bank Mandiri picked up Rp 1.33 trillion from interest and administrative charges.
Analysts predict that private consumption and investment will continue to fuel the country’s economic growth at above 6 percent, keeping the country growing at a healthy clip.
No comments:
Post a Comment